US embassy cable - 01HARARE1210

C O N F I D E N T I A L SECTION 01 OF 03 HARARE 001210 
 
SIPDIS 
 
NSC FOR SENIOR AFRICA DIRECTOR JENOAYI FRAZER 
 
LONDON FOR CHARLES GURNEY 
 
PARIS FOR BISA WILLIAMS 
 
NAIROBI FOR TERRY PFLAUMER 
                       CONFIDENTIAL 
 
PAGE 02        HARARE  01210  01 OF 03  031323Z 
 
PASS USAIO FOR A.AA/AFR V. DICKSON-HORTON ANO 
AFR/SA C. PALMA 
 
PASS USTR FOR ROSA WHITAKER 
 
E.O. 12958: DECL: 04/03/11 
TAGS: PGOV, ECON, EFIN, PREL, PINR, ZI 
SUBJECT: ZANU-PF INSIOER: THE COUNTRY IS UNDER 
INFORMAL SANCTIONS 
 
 
CLASSIFIEO BY CHARGE D'AFFAIRES EARL M. IRVING FOR 
REASONS 1.5 (B) ANO (D). 
 
SUMMARY 
 
1.  (C) AN ACADEMIC WITH VERY CLOSE TIES TO ZANU-PF 
LEADERSHIP CIRCLES, CLEVER MUMBENQEQWI, TOLD US APRIL 2 
THAT THE ZIMBABWEAN GOVERNMENT BELIEVES IT IS OPERATINQ 
UNDER AN INFORMAL INTERNATIONAL SANCTIONS REQIME.  THE 
GOVERNMENT PERCEIVES THE INTERNATIONAL COMMUNITY AS 
BEINQ BIASED IN FAVOR OF THE OPPOSITION MOVEMENT FOR 
OEMOCRATIC CHANQE (MOC), A PARTY HE DISMISSED AS 
INEFFECTIVE AND BOUND FOR OBLIVION.  HE BELIEVED THE 
WEST WAS WILLINQ TO ENQAQE MEANINQFULLY WITH ZIMBABWE 
ONLY WHEN PRESIDENT MUQABE IS OFF THE SCENE.  HE 
CONFIRMED TENSIONS BETWEEN THE GOVERNMENT AND THE WHITE 
BUSINESS COMMUNITY, ATTRIBUTINQ THEM TO AN AGENDA OF 
WRECKING TBE ECONOMY TO THE LATTER.  HE DEFENDED THE 
GOVERNMENT'S POLICY OF NOT DEVALUINQ THE CURRENCY, 
SAYING THAT TO DO SO WOULD HURT THE MAJORITY OF 
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PAGE 03        HARARE  01210  01 OF 03  031323Z 
ZIMBABWEANS WHO ARE DEPENDENT ON CHEAP IMPORTS.  HE SAW 
RESOLUTION OF THE LAND REFORM PROBLEM AS THE PANACEA FOR 
ZIMBABWE'S POLITICAL TROUBLES, NOTINQ THAT THE 
GOVERNMENT COULD SORT OUT QUICKLY ANCILLARY DIFFICULTIES 
ASSOCIATED WITH THE FAST TRACK RESETTLEMENT EFFORT.  HE 
THOUGHT THE INTERNATIONAL COMMUNITY HAS A KEY ROLE TO 
PLAY IN RESTORINQ ZIMBABWE TO ECONOMIC HEALTH, BUT 
DOUBTED IT WOULD MAKE ANY MOVE TO HELP PRIOR TO THE 
PRESIDENTIAL ELECTION SCHEDULED FOR 2002.  WE BELIEVE 
MUMBENQEQWI'S COMMENTS REFLECT THE MAINSTREAM THINKINQ 
OF ZANU-PF -- PARANOID, ISOLATIONIST, ECONOMICALLY 
UNSOUND AND MARKED BY CONSPIRACY THEORIES.  IF THE 
INTERNATIONAL COMMUNITY WANTS TO REVERSE ZIMBABWE'S 
RAPID ECONOMIC AND POLITICAL DECLINE, IT MUST DO A 
BETTER JOB OF QETTINQ AND SUSTAININQ THE GOVERNMENT'S 
ATTENTION.  END SUMMARY. 
 
US VERSUS THEM 
 
2.  (C) ZANU-PF INSIDER AND OEAN OF THE UNIVERSITY OF 
ZIMBABWE'S FACULTY OF SOCIAL STUDIES CLEVER MUMBENQEQWI 
(HIS BROTHER SAMUEL IS THE MINISTER OF EDUCATION, SPORT 
AND CULTURE, AND HIS BROTHER SIMBARASHE IS THE 
ZIMBABWEAN HIQH COMMISSIONER IN LONDON) TOLD US APRIL 2 
THAT IT WAS THE GOVERNMENT'S WIDELY-HELD PERCEPTION THAT 
ZIMBABWE WAS UNDER UNOFFICIAL SANCTIONS, WITH THE 
PROSPECT OF THEIR BEINQ LIFTED SOON CLOSE TO NIL.  HE 
THOUQHT THAT FOREIQN INVESTORS AND THE INTERNATIONAL 
FINANCIAL INSTITUTIONS WERE ON THE SIDELINES AND WAITINQ 
FOR THE PRESIDENTIAL ELECTION TO TAKE PLACE BEFORE 
ENQAGINQ ZIMBABWE MEANINQFULLY ONCE AQAIN. 
                       CONFIDENTIAL 
 
PAGE 04        HARARE  01210  01 OF 03  031323Z 
 
3.  (C) THE PERCEPTION IS THAT THE INTERNATIONAL 
COMMUNITY WAS SITTINQ WITH ITS ARMS CROSSED WATCHINQ 
ZIMBABWE COLLAPSE, ASSUMINQ THAT IT IS A BASKET CASE 
LIKE OTHER AFRICAN COUNTRIES.  THE POSITION OF THE 
INTERNATIONAL COMMUNITY TO FOSTER THE DOWNFALL AND 
REMOVAL OF THE RULINQ PARTY IMPINQES ON ZIMBABWE'S 
ECONOMIC HEALTH; IT IS NOT SOLELY A DOMESTIC ISSUE.  THE 
INTERNATIONAL COMMUNITY'S FOCUS ON A PERSONALITY, AND 
ITS WITHHOLDINQ OF ASSISTANCE UNTIL THAT PERSONALITY IS 
CHANQED ONLY QETS US INTO A POLITICAL PROBLEM, HE 
AVERRED. 
 
4.  (C) MUMBENQEQWI CONTINUED THAT THE GOVERNMENT WANTED 
TO USE THE ISSUE OF LAND REFORM TO BEQIN SOLVINQ 
DOMESTIC PROBLEMS ONCE AND FOR ALL, AS IT WAS AN ISSUE 
AROUND WHICH MOST ZIMBABWEANS COULD RALLY.  ONCE 
COMPENSATION FOR LAND COULD BE ARRANQED, THE GOVERNMENT 
COULD QUICKLY TAKE CARE OF THE OTHER THINGS, SUCH AS 
FARM INVASIONS, IN A SHORT PERIOD OF TIME.  THE REASON 
WHY THERE IS NO QOINQ BACK ON THE LAND ISSUE IS THAT 
POLITICIANS 
 HAVE SOLD THE PROQRAM TO THE NATION. 
ALTHOUQH HE AGREED THAT THEY OUQHT TO HAVE SOMETHINQ 
ELSE TO OFFER, IT WOULD COST ZANU-PF POLITICALLY IF IT 
WERE TO RETRACT TBE FAST-TRACK RESETTLEMENT PROQRAM. 
THAT THE QOVERNMENT ALONE SHOULD PAY FOR THE LAND 
RESETTLEMENT EXERCISE WAS ABSURD, MUMBENQEQWI STATED, 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ5770 
 
PAGE 01        HARARE  01210  02 OF 03  031324Z 
ACTION AF-00 
 
INFO  LOG-00   NP-00    AID-00   ACQ-00   CEA-01   CIAE-00  COME-00 
      CTME-00  DINT-00  DODE-00  DOTE-00  SRPP-00  DS-00    EB-00 
      EUR-00   EXIM-01  E-00     FAAE-00  FBIE-00  VC-00    FRB-00 
      H-01     TEDE-00  INR-00   ITC-01   L-00     VCE-00   AC-01 
      DCP-01   NSAE-00  OMB-01   OPIC-01  PA-00    PM-00    PRS-00 
      ACE-00   P-00     SP-00    SSO-00   STR-00   TRSE-00  USIE-00 
      FMP-00   PMB-00   DSCC-00  DRL-02   G-00     NFAT-00  SAS-00 
        /010W 
                  ------------------DACF5E  031325Z /38 
P 031328Z APR 01 
FM AMEMBASSY HARARE 
TO SECSTATE WASHDC PRIORITY 8570 
INFO NSC WASHDC PRIORITY 
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY 
AMEMBASSY NAIROBI 
 
C O N F I D E N T I A L SECTION 02 OF 03 HARARE 001210 
 
SIPDIS 
 
NSC FOR SENIOR AFRICA DIRECTOR JENOAYI FRAZER 
 
LONDON FOR CHARLES GURNEY 
 
PARIS FOR BISA WILLIAMS 
 
NAIROBI FOR TERRY PFLAUMER 
                       CONFIDENTIAL 
 
PAGE 02        HARARE  01210  02 OF 03  031324Z 
 
PASS USAIO FOR A.AA/AFR V. DICKSON-HORTON ANO 
AFR/SA C. PALMA 
 
PASS USTR FOR ROSA WHITAKER 
 
E.O. 12958: DECL: 04/03/11 
TAGS: PGOV, ECON, EFIN, PREL, PINR, ZI 
SUBJECT: ZANU-PF INSIOER: THE COUNTRY IS UNDER 
INFORMAL SANCTIONS 
 
AVERRINQ THAT AT NO TIME IN HISTORY HAS THIS OCCURRED. 
HE DISMISSED ANY GOVERNMENT RESPONSIBILITY FOR THE 
IMPENDINQ MAIZE SHORTAQE, ASSIQNINQ BLAME FOR IT TO THE 
MID-SEASON DROUQHT, WHICH KILLED OFF MOST OF THE EARLY 
CROP, AND THE DAMAQE DONE TO THE LATE CROP BY RECENT, 
EXCEEDINQLY HEAVY RAINS. 
 
THE RHODESIAN LEQACY LIVES ON 
 
5.  (C) THE SOCIAL STUDIES OEAN STATED THAT THERE WAS A 
LACK OF TRUST BETWEEN THE GOVERNMENT AND THE WHITE 
BUSINESS COMMUNITY BECAUSE THAT COMMUNITY WAS DOINQ ITS 
BEST IT COULD TO DESTROY THE COUNTRY'S ECONOMY IN ORDER 
TO BRINQ DOWN THE CURRENT GOVERNMENT.  WHITE 
BUSINESSMEN, HE ALLEGED, ARE DIRECTINQ SUBSTANTIAL 
PORTIONS OF THEIR FOREIGN EXCHANQE INFLOWS "THROUQH 
OTHER CHANNELS," BRINQINQ ONLY A SMALL FRACTION OF THEIR 
EARNINQS VIA OFFICIAL CHANNELS INTO ZIMBABWE.  THE 
PRIVATE SECTOR WAS MYOPIC AS TO WHERE ITS INTERESTS LIE 
AND SHORT-TERM IN ITS OUTLOOK, NOT INTERESTED IN THE 
                       CONFIDENTIAL 
 
PAGE 03        HARARE  01210  02 OF 03  031324Z 
GOOD OF THE COUNTRY, ITS GOVERNMENT OR ITS BLACK 
CITIZENS.  THIS VIEW IS WIDELY HELD AND ACCEPTED AS TRUE 
BY THE GOVERNMENT AND ITS LEADERSHIP, HE STATED. 
 
6.  (C) HE LECTURED US WITH A STRAIGHT FACE THAT FOR 
YEARS BUSINESSPERSONS HAVE LIVED OFF THE TAXPAYER 
(NOTWITHSTANDING THE FACT THAT BUSINESSES, VIA COMPANY 
AND PERSONAL INCOME TAXES, PAY OVER HALF THE NATIONAL 
TAX BILL), BUYING UP GOVERNMENT PAPER AND DRIVING UP 
INTEREST RATES, SO THAT THEY AND THE BANKS CAN GET THE 
HIGH YIELDS, THEREBY PLACING THE GOVERNMENT IN ITS 
CURRENT DEBT TRAP.  THERE'S A SHORT-TERM PRICE TO BE 
BORNE IN TURNING AROUND THE ECONOMY, HE OFFERED, AND THE 
COST SHOULD BE BORNE BY THE POPULATION IN GENERAL, AND 
NOT JUST THE GOVERNMENT.  "WE HAVE TO START SOMEWHERE," 
HE SHRUGGED; "SOMEONE WILL ALWAYS CALL FOUL."  HE SAID 
THAT THE NATION IS IN CRISIS AND IT IS TIME TO STAND 
TOGETHER AND NOT TRY TO SPLIT THE NATION, SOMETHING THE 
DONOR COMMUNITY IS CLEARLY TRYING TO DO.  THE WHITE 
BUSINESS COMMUNITY, ON THE OTHER HAND, IS OF THE VIEW 
THAT "YOU CAUSED THIS MESS, YOU GET OUT OF POWER." 
 
7.  (C) TURNING TO THE REASON WHY THE GOVERNMENT STUCK 
TO A DYSFUNCTIONAL A FIXED EXCHANQE RATE, MUMBENQEQWI 
EXPLAINED THAT ZIMBABWE IS EXTREMELY IMPORT DEPENDENT; 
EVEN MANY OF ITS EXPORTS CONTAIN A HIQH PERCENTAQE OF 
IMPORTED CONTENT.  ALLOWINQ THE ZIMBABWE DOLLAR TO FLOAT 
TO ITS MARKET VALUE WOULD INCREASE THE PRICE OF INPUTS. 
EXPORTERS, WHO HAVE ACCESS TO FOREIQN CURRENCY, FAVOR 
DEVALUATION.  HOWEVER, BECAUSE THEY ARE A MINORITY OF 
THE POPULATION (WHEREAS IMPORTS IMPACT A MAJORITY OF THE 
                       CONFIDENTIAL 
 
PAGE 04        HARARE  01210  02 OF 03  031324Z 
POPULATION), THE POLITICAL PRESSURE THEY BRINQ TO BEAR 
TO DEVALUE IS NOT AS INTENSE.  IT IS THE GOVERNMENT'S 
SINCERE VIEW THAT COUNTRIES THAT HAVE DEVALUED THEIR 
CURRENCIES OR IMPLEMENTED STRUCTURAL ADJUSTMENT HAVE NOT 
DONE BETTER THAN THOSE THAT HAVE NOT DONE SO, HE 
CLAIMED.  HE COMPLAINED THAT THE ]AST TIME THE 
GOVERNMENT DEVALUED THE CURRENCY FOR 38.5 TO 55 TO THE 
U.S. DOLLAR, THERE WAS NO COMMENSURATE IMPROVEMENT IN 
EXPORT SECTOR PERFORMANCE.  THE GOVERNMENT, HE HELD, 
COULD DEVALUE THE CURRENCY BY 1000 PERCENT -- A MOVE 
THAT WOULD WRECK THE IMPORT SECTOR -- AND STILL QET NO 
RESPONSE.  EXPORTERS ARE SIMPLY SEEKINQ WINDFALL QAINS, 
HE ALLEQED, WHICH THEY ARE QETTINQ IN THE FOREIQN 
EXCHANQE BLACK MARKET. 
 
BUT WE SHALL PREVAIL 
 
8.  (C) WHILE MUMBENQEQWI BELIEVED THAT THE 
INTERNATIONAL COMMUNITY FAVORED THE OPPOSITION MDC, HE 
PREDICTED THAT IF IT WERE TO LOSE THE PRESIDENTIAL 
ELECTION IT WOULD SUFFER THE FATE OF ALL AFRICAN ALSO- 
RANS: DISINTEQRATION.  "IF THEY WIN," HE OBSERVED 
IRONICALLY, "THEN WE WILL HAVE VERY EXCITINQ TIMES."  HE 
WAVED AWAY THE CONSTITUTION THAT THE NATIONAL 
CONSTITUTIONAL ASSEMBLY IS PREPARINQ, CALLINQ IT A 
CAMPAIQN DOCUMENT TO BE USED AS A RALLYINQ POINT.  HE 
THOUQHT THAT THE CIVIL SOCIETY ORQANIZATION, INSTEAD OF 
WORKINQ TO DEFEAT A FLAWED CONSTITUTION IN THE FEBRUARY 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ5771 
 
PAGE 01        HARARE  01210  03 OF 03  031324Z 
ACTION AF-00 
 
INFO  LOG-00   NP-00    AID-00   ACQ-00   CEA-01   CIAE-00  COME-00 
      CTME-00  DINT-00  DODE-00  DOTE-00  SRPP-00  DS-00    EB-00 
      EUR-00   EXIM-01  E-00     FAAE-00  FBIE-00  VC-00    FRB-00 
      H-01     TEDE-00  INR-00   ITC-01   L-00     VCE-00   AC-01 
      DCP-01   NSAE-00  OMB-01   OPIC-01  PA-00    PM-00    PRS-00 
      ACE-00   P-00     SP-00    SSO-00   STR-00   TRSE-00  USIE-00 
      FMP-00   PMB-00   DSCC-00  DRL-02   G-00     NFAT-00  SAS-00 
        /010W 
                  ------------------DACF89  031327Z /38 
P 031328Z APR 01 
FM AMEMBASSY HARARE 
TO SECSTATE WASHDC PRIORITY 8571 
INFO NSC WASHDC PRIORITY 
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY 
AMEMBASSY NAIROBI 
 
C O N F I D E N T I A L SECTION 03 OF 03 HARARE 001210 
 
SIPDIS 
 
NSC FOR SENIOR AFRICA DIRECTOR JENOAYI FRAZER 
 
LONDON FOR CHARLES GURNEY 
 
PARIS FOR BISA WILLIAMS 
 
NAIROBI FOR TERRY PFLAUMER 
                       CONFIDENTIAL 
 
PAGE 02        HARARE  01210  03 OF 03  031324Z 
 
PASS USAIO FOR A.AA/AFR V. DICKSON-HORTON ANO 
AFR/SA C. PALMA 
 
PASS USTR FOR ROSA WHITAKER 
 
E.O. 12958: DECL: 04/03/11 
TAGS: PGOV, ECON, EFIN, PREL, PINR, ZI 
SUBJECT: ZANU-PF INSIOER: THE COUNTRY IS UNDER 
INFORMAL SANCTIONS 
 
2000 REFERENDUM, SHOULD INSTEAD HAVE PARTICIPATED IN THE 
DRAFTINQ PROCESS AND NEQOTIATED ON THE PORTIONS WITH 
WHICH IT DISAQREED.  HE CLAIMED THAT THE OPPOSITION, 
WHICH HAD QROWN FROM THE PRESIDENT AND THE GOVERNMENT'S 
ECONOMIC MISMANAQEMENT OF THE COUNTRY, HAD NOT COME UP 
WITH AN ALTERNATIVE PROQRAM TO PULL THE COUNTRY OUT OF 
ITS CURRENT PREDICAMENT.  FURTHERMORE, IT HAD NOT 
ARTICULATED HOW IT PLANNED TO BRING THE DONORS BACK. 
INDEED, THE OPPOSITION HAS FAILED TO CAPTURE THE 
IMAGINATION OF THE PEOPLE OF ZIMBABWE, HE DECLARED.  HE 
CLAIMED THAT THE FEELING IN THE COUNTRY WAS THAT THE 
RULING PARTY HAD GAINED GROUND OVER THE OPPOSITION IN 
THE LAST FEW MONTHS.  HE ALSO WINKED THAT THE 
INTERNATIONAL COMMUNITY'S PUTTINQ PRESIDENT MUQABE IN A 
CORNER SERVED TO BOLSTER HIS DOMESTIC POPULARITY. 
 
COMMENT 
 
9.  (C) IF WE PART FROM THE PREMISE THAT PERCEPTION IS 
REALITY, TBEN THE U.S.-EDUCATED MUMBENQEQWI QIVES A 
                       CONFIDENTIAL 
 
PAGE 03        HARARE  01210  03 OF 03  031324Z 
DISTRESSINQ ACCOUNT OF HIS COUNTRY'S QOVERNANCE: THE 
MINDS OF ITS LEADERSHIP ARE IN A PRISON OF ECONOMIC 
OBSCURANTISM AND CONSPIRACY THEORIES.  WE HAVE NO DOUBT 
THAT THE SOCIAL SCIENCE PROFESSOR'S EPISTEMOLOQY 
REPRESENTS THE MAINSTREAM THINKINQ OF THE RULINQ PARTY. 
UNFORTUNATELY, THE CHASM BETWEEN THIS PERCEPTION AND 
REALITY IS WIDE, AND CORRECTIVE ACTION WITH ANY HOPE OF 
DOINQ QOOD IS THUS FAR OUT OF QRASP.  BETWEEN NOW AND 
THE PRESIDENTIAL ELECTION, REAL DAMAQE TO ZIMBABWE WILL 
CONTINUE TO OCCUR AT AN UNSUSTAINABLE RATE, AS THE PARTY 
FAITHFUL IQNORE THE CARNAQE AND PLAY FOLLOW-THE-LEADER 
TO NEVER-NEVER LAND.  IF THE WEST OR THE DONORS WANT TO 
CHANQE THIS PATTERN THEY MUST DO A BETTER JOB OF GETTING 
   AND SUSTAINING -- THE GOVERNMENT'S ATTENTION.  WE ARE 
CONVINCED NOW THAT ONLY STEPS WHICH AFFECT PRESIDENT 
MUGABE AND HIS CRONIES PERSONALLY -- SUCH AS RESTRICTING 
THEIR INTERNATIONAL TRAVEL AND FREEZING THEIR ASSETS -- 
CAN HALT ZIMBABWE'S SLIDE TOWARD ECONOMIC AND POLITICAL 
COLLAPSE.  END COMMENT. 
 
IRVING 
 
                       CONFIDENTIAL 
 
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